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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 2)
Citadel Technology, Inc.
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(Name of Issuer)
Common stock, par value $.01 per share
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(Title of Class of Securities)
172854-10-1
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(CUSIP Number)
Margaret G. Reed, 4400 Post Oak Parkway, Suite 1100, Houston, Texas 77027
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(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
October 29, 1999
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A fee is
not required only if the reporting person: (1) has a previous statement on
file reporting beneficial ownership of more than five percent of the class of
securities described in Item 1; and (2) has filed no amendment subsequent
thereto reporting beneficial ownership of five percent or less of such class.)
(See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be filed
with the Commission. See Rule 13d-1(a) for other parties to whom copies are to
be sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities,
and for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section of
the Act but shall be subject to all other provisions of the Act (however, see
the Notes).
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SCHEDULE 13D
<TABLE>
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CUSIP No. 172854-10-1 Page 2 of 6 Pages
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<S> <C> <C>
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1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Metamor Worldwide, Inc. (formerly CORESTAFF, Inc.)
76-0407849
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [ ]
(b) [ ]
N/A
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3 SEC USE ONLY
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4 SOURCE OF FUNDS*
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e)
N/A
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
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7 SOLE VOTING POWER
NUMBER OF 5,781,937
SHARES -------------------------------------------------------------------------------------------------------------------
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY -0-
EACH -------------------------------------------------------------------------------------------------------------------
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON 5,781,937
WITH --------------------------------------------------------------------------------------------------------------------
10 SHARED DISPOSITIVE POWER
-0-
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11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,781,937
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
N/A
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13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.3%
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14 TYPE OF REPORTING PERSON*
CO
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</TABLE>
*SEE INSTRUCTIONS BEFORE FILLING OUT!
INCLUDE BOTH SIDES OF THE COVER PAGE, RESPONSES TO ITEMS 1-7
(INCLUDING EXHIBITS) OF THE SCHEDULE, AND THE SIGNATURE ATTESTATION.
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CUSIP No. 172854-10-1 Page 3 of 6 Pages
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This Amendment No. 2 amends and restates the Schedule 13D filed
by Metamor Worldwide, Inc., with the Commission on October 15, 1997, as amended
by Amendment No. 1 to the Schedule 13D, filed with the Commission on May 26,
1998 (collectively, the "Amended 13D Filings"). Capitalized terms used herein
that have not otherwise been defined shall have the meaning set forth in the
amended 13D Filings.
Item 1. Security and Issuer
This statement relates to the Common Stock, par value $.01 per
share (the "Common Stock") of Citadel Technology, Inc. (the "Issuer"). The
principal executive offices of the Issuer are located at 3811 Turtle Creek
Boulevard, Suite 770, Dallas, Texas 75219.
Item 2. Identity and Background
This statement is being filed by Metamor Worldwide, Inc. (the
"Reporting Person"). The Reporting Person is a Delaware corporation, whose
principal business is providing information technology solutions. The
business address of the Reporting Person is 4400 Post Oak Parkway, Suite 1100,
Houston, Texas 77027.
The Reporting Person has not, during the last five years, been (i)
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors) or (ii) a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and, as a result of such
proceeding, was or is subject to a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to,
federal or state securities laws or finding any violation with respect to such
laws.
Item 3. Source and Amount of Funds or Other Consideration.
On October 6, 1997, the Reporting Person acquired (i) a total of
2,500,000 shares of Issuer Common Stock, (ii) a warrant to acquire 1,000,000
shares of Issuer Common Stock at an exercise price of $4.00 per share and (iii)
a warrant to acquire 1,000,000 shares of Issuer Common Stock at an exercise
price of $5.00 per share. The aggregate consideration paid by the Reporting
Person for the issued shares was $750,000. The source of such consideration was
the Reporting Person's corporate working capital.
On May 15, 1998, the Reporting Person acquired a total of 2,000
shares of the Issuer's Series D Convertible Redeemable Preferred Stock (the
"Preferred Stock"). The Reporting Person paid an aggregate consideration of
$2,000,000 for the Preferred Stock. The source of such consideration was the
Reporting Person's working capital. The Preferred Stock was converted into
2,081,937 shares of Issuer Common Stock on June 17, 1999.
Item 4. Purpose of Transaction
The Reporting Person has acquired the Issuer's securities for
investment. As described in Item 5 below, the Reporting Person has recently
disposed of 800,000 shares of Issuer Common Stock. Depending on market
conditions and other factors, the Reporting Person may dispose of all or an
additional portion of the Issuer Common Stock which he now owns or hereafter may
acquire. Except as set forth in the next sentence, the Reporting Person as a
stockholder of the Issuer has no present plans or proposals which relate to or
would result in an extraordinary corporate transaction, such as a merger,
reorganization or liquidation involving the Issuer or any of its subsidiaries, a
sale or transfer of a material amount of the Issuer's assets, a change in the
present Board of Directors or management of the Issuer, including any plans or
proposals to change the number or term of directors or to fill any existing
vacancies on the Board, any material change in the present capitalization or
dividend policy of the Issuer, any other material change in the Issuer's
business or corporate structure, changes in the Issuer's charter or bylaws or
other actions which may impede the acquisition of control of the Issuer by any
person or causing a class of securities of the Issuer to be delisted from a
national securities exchange or to cease to be authorized to be quoted in an
inter-dealer quotation system of a registered national securities association, a
class of equity securities becoming eligible for termination of registration
pursuant to Section 12 (g)(4) of the Securities Exchange Act of 1934 or any
action similar to any of the foregoing. Notwithstanding the foregoing, as part
of the transaction to acquire the shares of Issuer Common Stock on October 6,
1997, the Issuer and Steven B. Solomon, the Issuer's Chief Executive Officer,
agreed to use their best efforts to elect one person designated by the Reporting
Person to the Issuer's Board of Directors. Edward L. Pierce, an executive
officer of the Reporting Person, has been elected to the Issuer's Board of
Directors pursuant to such right.
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CUSIP No. 172854-10-1 Page 4 of 6 Pages
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Item 5. Interest in Securities of the Issuer
As of October 18, 1999, the Reporting Person was the beneficial
owner of an aggregate of 6,581,937 shares of Issuer Common Stock, which
represented approximately 15.1% of the 43,410,698 shares of Issuer Common Stock
outstanding as of that date (assuming exercise of both warrants held by the
Reporting Person). Between October 21, 1999 and October 29, 1999, the Reporting
Person disposed of 800,000 shares of Issuer Common Stock at an average price of
$2.37 per share, in accordance with the provisions of Rule 144 of the Securities
Act of 1993. The Issuer Common Stock was sold on NASDAQ. The Reporting Person is
currently the beneficial owner of 5,781,937 shares of Issuer Common Stock, which
represented approximately 13.3% of the 43,410,698 shares of Issuer Common Stock
outstanding as of October 18, 1999. The Reporting Person has sole power to vote
(or to direct the vote) and sole power to dispose (or to direct the disposition)
of the entire number of shares reported as beneficially owned by it.
Item 6. Contracts, Arrangements, Understandings or Relationships with
Respect to Securities of the Issuer
On October 6, 1997, the Issuer and the Reporting Person entered
into a purchase agreement (the "Purchase Agreement") pursuant to which the
Reporting Person acquired 2,500,000 shares of newly issued Common Stock of the
Issuer for an aggregate purchase price of $750,000. In addition, the Issuer
also issued two warrants to the Reporting Person for the purchase of an
aggregate of 2,000,000 shares of Issuer Common Stock . The first warrant is
for the purchase of 1,000,000 shares of Issuer Common Stock at an exercise of
$4.00 per share and the second warrant is for the purchase of 1,000,000 shares
of Issuer Common Stock at an exercise price of $5.00 per share. Both warrants
are exercisable immediately and expire on the tenth anniversary of the date of
issuance (October 6, 2007).
On May 15, 1998, the Issuer and the Reporting Person entered into a
subscription agreement (the "Subscription Agreement") pursuant to which the
Reporting Person acquired 2,000 shares of Preferred Stock for an aggregate
purchase price of $2,000,000 ($1,000 per share). On June 17, 1999 the Preferred
Stock was converted into 2,081,937 shares of Issuer Common Stock.
Pursuant to the Purchase Agreement, the Issuer and Steven B.
Solomon, the Issuer's Chief Executive Officer, agreed to use their best efforts
to elect one person designated by the Reporting Person to the Issuer's Board of
Directors. Edward L. Pierce, an executive officer of the Reporting Person,
has been elected to the Issuer's Board of Directors pursuant to such right. In
addition, so long as the Reporting Person owns more than 5% of the Issuer's
Common Stock, the Reporting Person has the right to approve, which approval can
not be unreasonably withheld, certain fundamental transactions involving the
Issuer, including dividends, sales or redemptions of stock in excess of certain
thresholds, mergers and acquisitions, affiliated transactions, sales of
substantial assets, changes in the nature of the business, incurrence of
additional funded indebtedness and liquidation.
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CUSIP No. 172854-10-1 Page 5 of 6 Pages
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Pursuant to the Purchase Agreement, the Issuer and the Reporting
Person also entered into a registration rights agreement (the "Registration
Agreement") for the Issuer's Common Stock acquired by or acquirable by the
Reporting Person. The Registration Agreement provides that the Reporting Person
has the right to require the Issuer to register the Reporting Person's shares of
Common Stock (including Common Stock issuable upon conversion of the Preferred
Stock), for resale with the Securities and Exchange Commission at the election
of the Reporting Person at any time after October 6, 1998. In addition, the
Registration Agreement also provides the Reporting Person with the right to
participate in any public offering of equity securities effected by the Issuer.
All costs of such registrations (other than selling expenses or underwriting
discounts) are at the Issuer's expense.
Except as described in this statement, there are no other
contracts, arrangements, understandings or relationships (legal or otherwise)
between the Reporting Person and any person with respect to any securities of
the Issuer.
Item 7. Materials to be Filed as Exhibits
(a) Purchase Agreement dated October 6, 1997 between the Reporting
Person and the Issuer.(1)
(b) Warrant No. 1 for the purchase of 1,000,000 shares of Issuer
Common Stock at an exercise price of $4.00 per share.(1)
(c) Warrant No. 2 for the purchase of 1,000,000 shares of Issuer
Common Stock at an exercise price of $5.00 per share.(1)
(d) Registration Rights Agreement dated October 6, 1997 between
the Reporting Person and the Issuer.(1)
(e) Purchase Agreement dated May 15, 1998 between the Reporting
Person and the Issuer. (2)
(1) - Previously filed as an Exhibit to the Reporting Person's original
Schedule 13-D filed with the Securities and Exchange Commission on
October 15, 1997.
(2) - Previously filed as an Exhibit to the Reporting Person's Amendment No.1
to Schedule-D filed with the Securities and Exchange Commission on May
26, 1998.
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CUSIP No. 172854-10-1 Page 6 of 6 Pages
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
METAMOR WORLDWIDE, INC.
November 23, 1999 /s/ Margaret G. Reed
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Date By: Margaret G. Reed
Its: Senior Vice President
